I think Tim's idea of an angle mount using the original holes is a good idea.
No Frank, there is no way to gut the original housing and use a self centering bearing.
I'm sure you can get a u-joint that will work up by the pump, but you need to keep in mind that that doesn't help.... the shaft needs to run as straight as possible. If the shaft comes through the rear bearing at an angle, the hub won't be running straight with the coil. You will have a misalignment and the hub will hit the coil. Plus, then the pulley could be crooked in relation to the lower pulley. The pulley alignment isn't vastly critical, but the closer the better.
While I do agree that the design IH originally came up with leaves a lot to be desired, the real solution is the rear shaft needs to be splined just like the pump. If it was, the use of two shafts would still be fine. Front shaft with welded couplers on both ends, and installed when the bearing block is bolted on. That is the most reasonable solution without redesigning the whole set-up. A solid shaft to the rear would be the next best thing, but that would require a different PTO clutch, and a different bearing set-up completely. If you want to redesign the whole thing, that's not bad at all. I see no reason you couldn't contact the company Extreme that makes PTO's, that Sam suggests all the time, to make a new style self-supporting clutch. Then you need only a pillow block bearing to the rear, with a snap-ring groove or a lock collar on the shaft to hold it from moving rearward. Small misalignment in the clutch pulley won't matter. I intend to try and build my own rear PTO for the 982 I just bought, and that was what I was going to try to do.... but I still need some dems on the other parts. Pretty sure I can go up and look at some of the rear PTO tractors
spudder has.